Saturday, 24 December 2016

SINGAPORE'S LONG STRETCH OF DEFLATION ENDS IN NOVEMBER


After the longest spell of negative inflation -- 24 straight months --, Singapore's consumer price index was flat in November compared to the same month a year ago.

This improvement was led by a stronger pickup in services fees and food prices, according to the joint statement from Monetary Authority of Singapore and Ministry of Trade and Industry.

Overall services inflation sees 1.5% pickup in the same month. The progressive phasing down of the Transitional Subsidies for MediShield Life premiums contributed to the rise in the cost of medical & dental treatment. Meanwhile, air fares and telecommunication services fees declined.

Food inflation also edged up to 2%, on the back of a larger increase in the prices of non-cooked food items such as vegetables and fruits. Private road transport cost also rose up 0.2% after remaining unchanged in October due to smaller drag posed by petrol pump prices.

On the other hand, accommodation cost fell 3.8% in November amidst the continued softness in the housing rental market.

MAS Core Inflation is expected to average around 1% in 2016 before 1%-2% next year
"Energyrelated components are projected to contribute positively to inflation in 2017, while the temporary disinflationary effects from budgetary measures will fade," MAS and MTI said.

They added, "However, the increase in core inflation will be gradual, given the absence of more generalised demand-induced price pressures. CPI-All Items inflation has troughed and is projected to pick up to 0.5–1.5% next year, from around -0.5% in 2016, largely reflecting the rise in private road transport cost."




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